April 13, 2009
ACCC starts market inquiries on proposed undertakings by Baiada Poultry
The Australian Competition and Consumer Commission has began market inquiries on a proposed section 87B undertaking from Baiada Poultry, which seeks to address competition concerns previously identified by the ACCC.
The ACCC on February 11 this year declared its opposition of Baiada's proposed acquisition of Bartter, stating that the acquisition would substantially lessen competition in markets for the wholesale supply of processed chicken, in contrast of section 50 of the Trade Practices Act 1974.
To address the ACCC's competition concerns, Baiada has now offered a proposed undertaking under section 87B of the Act.
Under the proposed undertaking, Baiada will simultaneously divest all assets currently owned by Bartter in Victoria to La Ionica Poultry.
The divested assets include Bartter's Geelong processing plant, associated breeding farms and hatcheries and Bartter's North Melbourne feed mill. If accepted by the ACCC, the proposed undertaking commits Baiada to the divestiture of certain assets as a condition of the proposed acquisition.
La Ionica currently operates a chicken processing facility in Thomastown Victoria, and is a major supplier of whole dressed birds to customers, predominantly in Victoria and to a lesser extent in New South Wales.
The ACCC is now seeking insights from market participants to assist its consideration of the proposed undertaking and determine whether the proposed divestiture would be likely to alleviate the ACCC's competition concerns.
